Binance and its founder Changpeng Zhao have lost a court appeal to dismiss a lawsuit alleging securities violations in the United States.

The U.S. Supreme Court has denied an appeal from Binance and former CEO Changpeng ‘CZ’ Zhao to squash a class action lawsuit from investors claiming the company sold unregistered securities.

The complaint, filed by crypto traders, accuses Binance of inadequate risk disclosure tied to tokens such as Tron (TRX), EOS (EOS), among others. Recouping funds invested in these tokens is one of the primary objectives outlined in the lawsuit.

Binance and its legal team refuted the allegations, arguing that the exchange’s operations fall outside the jurisdiction of U.S. securities laws. Based on this argument, Binance initially sought to have the case dismissed by the United States Court of Appeals for the Second Circuit.

However, the Appeals Court ruled that Binance was liable for the transactions, noting that investors purchased the tokens within the U.S. The Supreme Court upheld this decision, according to a Jan. 13 report.

The news could be another legal blow to crypto’s largest centralized exchange, which has already faced court battles on U.S. soil.

In November 2023, Binance agreed to a $4.3 billion settlement with the Department of Justice over federal anti-money laundering violations. CZ resigned as CEO and spent four months in prison as part of the deal.

The DOJ case was unrelated to the class action lawsuit filed by investors. CZ’s company is also embroiled in a securities court case with the U.S. Securities and Exchange Commission.